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CIMAPRA19-P03-1 Exam - Topic 2 Question 55 Discussion

COM is a well established company in the construction industry The company was founded by the Mac family 30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitorsWhich THREE of the following statements are correct?
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy and B) The nomination committee should have had a succession plan in place for directors. and E) The non-executive directors should have challenged the lack of long term strategic planning
C) The nomination committee should be operating for the benefit of the directors.
D) The audit committee should have alerted the Board to the impact of falling profit margins

CIMAPRA19-P03-1 Exam - Topic 2 Question 55 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam
Question #: 55
Topic #: 2
[All CIMAPRA19-P03-1 Questions]

COM is a well established company in the construction industry The company was founded by the Mac family 30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68

COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors

Which THREE of the following statements are correct?

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Suggested Answer: A, B, E

by Viola at Sep 18, 2024, 11:21 AM

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Titus
9 months ago
The non-executive directors should have been more proactive about strategy!
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Trinidad
10 months ago
Totally agree, share options could motivate the Board for long-term focus.
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Jacquelyne
10 months ago
Not sure if the audit committee really dropped the ball here.
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Annabelle
10 months ago
A succession plan is definitely needed for the directors.
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Zana
10 months ago
The average age of board members is 68, wow!
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Isidra
10 months ago
I feel like the non-executive directors should be more proactive in challenging the board, especially with the declining profits. That seems crucial.
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Casey
11 months ago
I’m a bit confused about the audit committee's responsibilities. Shouldn't they focus more on financial accuracy rather than strategic issues?
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Reid
11 months ago
I think the nomination committee definitely should have a succession plan. It seems like a basic governance requirement, right?
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Youlanda
11 months ago
I remember discussing the role of the remuneration committee in class, but I'm not sure if share options are the best way to encourage long-term thinking.
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Jodi
11 months ago
I'll focus on the specific responsibilities of the committees and how they relate to the company's challenges. That should help me select the correct statements.
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Ben
11 months ago
Hmm, the average age of the board members is quite high, so the succession planning aspect is an important consideration.
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Ocie
11 months ago
I think the key is identifying the issues the company is facing and then determining which committees should have addressed them. The options give some good clues.
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Murray
11 months ago
The question is asking about the responsibilities of the different board committees, so I'll need to carefully consider the role of each one.
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Malcolm
11 months ago
This question seems straightforward, but I want to make sure I understand the key points before selecting my answers.
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Avery
2 years ago
The board members must be napping if their average age is 68. Time for some fresh blood!
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Veronique
2 years ago
B) The nomination committee should have had a succession plan in place for directors.
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Arlyne
2 years ago
The board needs younger members with fresh ideas.
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Clare
2 years ago
E) The non-executive directors should have challenged the lack of long term strategic planning
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Brice
2 years ago
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
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Kimbery
2 years ago
The non-executive directors should have challenged the lack of long-term strategic planning. That's their job, isn't it? They need to earn their keep.
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Reiko
2 years ago
D) The audit committee should have alerted the Board to the impact of falling profit margins
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Janna
2 years ago
E) The non-executive directors should have challenged the lack of long term strategic planning
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Horace
2 years ago
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
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Joanne
2 years ago
I'm not so sure about the nomination committee operating for the benefit of the directors. Shouldn't they be looking out for the company's best interests?
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Eulah
2 years ago
E) The non-executive directors should have challenged the lack of long term strategic planning
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Christa
2 years ago
B) The nomination committee should have had a succession plan in place for directors.
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Yvonne
2 years ago
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
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Aron
2 years ago
The audit committee should have definitely alerted the board to the impact of falling profit margins. That's a crucial oversight.
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Melina
2 years ago
I believe option E is correct as well. Non-executive directors should have challenged the lack of long term strategic planning.
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Nathan
2 years ago
I agree with Lenny. Option D is also correct because the audit committee should have alerted the Board about falling profit margins.
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Geraldo
2 years ago
Absolutely, the nomination committee should have had a succession plan in place for the directors. This oversight is concerning.
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Bettina
2 years ago
E) The non-executive directors should have challenged the lack of long term strategic planning
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Verda
2 years ago
B) The nomination committee should have had a succession plan in place for directors.
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Ben
2 years ago
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
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Cristal
2 years ago
The remuneration committee should definitely consider incentives like share options to encourage the board to focus on the company's long-term strategy. That's a no-brainer.
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Jesus
2 years ago
E) The non-executive directors should have challenged the lack of long term strategic planning
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Arlie
2 years ago
A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
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Lenny
2 years ago
I think option A is correct because it's important to incentivize the Board to focus on long term strategy.
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